Aggregate Supply
A term that refers to the total quantity of goods and services that producers in an economy are willing and able to supply at different price levels.
What is aggregate supply?
These four components make up aggregate demand: consumption, investment, government spending, and this.
What is net exports?
A rise in this general measure of prices reduces consumers’ purchasing power and can lower aggregate demand.
What is inflation?
Taxes, savings, and imports.
What are leakages (withdrawals)?
A point on the PPF curve.
What point would represent efficient use of resources?
The direction of shift of the aggregate supply curve that represents technological advancements.
What is a shift to the right (increase)?
Output (real GDP) and price level?
What does the aggregate demand curve show us the relationship between?
A decrease in this type of spending by households on goods and services will cause a leftward shift in aggregate demand.
What is consumption?
The five sectors in the circular flow model.
What are households, firms, financial institutions, government, and overseas sector?
A point outside the PPF
What is a point that represents a currently impossible level of production?
The other group of factors that shift aggreggate supply curves (that we have talked about) : Costs of production, GST, labour force size and skills, and this one.
What is productivity
If consumer confidence increases and people spend more, aggregate demand does this.
What is a shift right (increase)?
A reduction in corporate taxes can shift aggregate supply to the right because firms have more money to spend on this type of economic activity.
What is investment?
In the context of the foreign sector, the flow that represents an injection into the domestic economy.
What are imports?
The definition for the loss of other alternatives when one alternative is chosen.
What is opportunity cost?
In the short run, the aggregate supply curve slopes upward because of this.
What are sticky wages and prices?
A type of policy used to increase aggregate demand, which includes a decrease in taxes or an increase in government spending.
What is expansionary fiscal policy?
This causes an increase in real gdp as well as an increase in inflation.
What is a rightward shift of the aggregate supply curve?
The financial flow that represents factor payments in the circular flow model.
What are Rent, wages, interest, and profit.
Shown by outward shift of the PPF, indicating an increase in an economy’s productive capacity.
What is economic growth?
When aggregate supply decreases and prices rise at the same time, it creates this economic condition, which combines slow growth and high inflation.
What is stagflation?
An explanation for the downward slope of the aggregate demand curve (Three possible answers - we focused on one)
What is the wealth effect
The effect of new migrants arriving in a country.
What would cause a rightward shift of both aggregate supply and aggregate demand.
A reason the increase in growth in the economy may be smaller than expected if household incomes increase.
What is an increase in savings (or an increase in import payments)
A way to represent providing job search assistance to the unemployed in the PPF model.
What is a movement from a point within the PPF to another point closer to (or on) the curve.